What is a retirement permit for South Africa?
A retirement permit allows for the holder to retire and live in South Africa in a permanent capacity. The retirement permit has become a popular option in the expat community for many reasons. South Africa continues to offer potential retirees the high-quality lifestyle, value for money and climate that they’re looking for, and thus it comes as no surprise that there’s been an increase in the number of retirees settling in the rainbow nation.
Who is a retirement permit for?
A retired permit is granted to immigrants wishing to retire in South Africa. For immigration to South Africa, under the category of a retired permit, the criteria is based on the premise that the immigrant is not looking to work, study or carry out their own business.
However, the immigrant will need to have assets and equity to sustain themselves for the duration of their retirement.
How would I qualify for permanent residency on this basis?
You would need to have access to either a pension, an irrevocable annuity or retirement account which affords an income of at least R37,000 a month for the rest of your life.
Alternatively, your cash or a combination of assets must generate the equivalent amount (R37,000) per month. There is no age restriction to this category.
When applying for a retired permit there is a number of standard items, which include:
- Either the permanent or temporary residency application form
- Valid passport
- Medical and radiological reports
- Police clearance certificate (s)
- Yellow fever certificate (where applicable)
Can I work if issued with this category of permanent residence?
Individuals issued with permanent residency on this basis are eligible to conduct “retirement type work activity”. The Department of Home Affairs may authorise you to conduct work under certain terms and conditions they deem suitable.
Are there any tax implications surrounding residency in South Africa?
South Africa operates on a worldwide taxation system that is residency based. This means that evaluating tax requirements for foreigners it looks at whether this is your permanent home and how many days you spend in South Africa. Previously, ‘swallows’ might have flown under the tax radar, but recent tax changes, including the fact that all homeowners must now be tax registered, have negated this.
Pros of a retirement permit
- South Africa is retirees friendly, and there are no maximum or minimum age requirements for a retirement permit.
- South Africa is, however, retiree tax friendly. It has in place numerous double taxation agreements, no tax on foreign sourced pensions schemes and a very low capital gains tax rate (which is great for those with capital).
- Both income and capital can be used depending upon whether a temporary or permanent retired person permit is being applied for
- The value of pensions and rental income from the property can be utilised for proving income.
Cons of retirement permit
- Applications submitted abroad or locally tend to be processed in 18 – 24 months.
- Strict financial requirements need to be met.
Temporary Residency Option
Apply for a retirement visa if you’re looking to retire in South Africa on a temporary basis